PRINTER'S NO. 4029
No. 2693 Session of 2004
INTRODUCED BY TANGRETTI, D. EVANS, DeWEESE, VEON, BEBKO-JONES,
BIANCUCCI, CASORIO, CORRIGAN, COSTA, CRUZ, DeLUCA, DIVEN,
FABRIZIO, FRANKEL, FREEMAN, GEORGE, GERGELY, GRUCELA,
HALUSKA, HANNA, HARHAI, HORSEY, JOSEPHS, KIRKLAND, KOTIK,
LaGROTTA, LAUGHLIN, LESCOVITZ, MANDERINO, MARKOSEK, McGEEHAN,
MELIO, MUNDY, PETRARCA, PETRONE, READSHAW, SAINATO, SHANER,
SURRA, WALKO, WILLIAMS, WOJNAROSKI AND YUDICHAK, JUNE 9, 2004
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,
JUNE 9, 2004
AN ACT
1 Amending Titles 12 (Commerce and Trade) and 64 (Public
2 Authorities and Quasi-Public Corporations) of the
3 Pennsylvania Consolidated Statutes, providing for water
4 supply and wastewater infrastructure capitalization; defining
5 "community development financial institution" and "investor-
6 owned water or wastewater enterprise"; further providing for
7 the First Industries Program; and providing for Water Supply
8 and Wastewater Infrastructure Program.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. Title 12 of the Pennsylvania Consolidated
12 Statutes is amended by adding a chapter to read:
13 CHAPTER 39
14 WATER SUPPLY AND WASTEWATER
15 INFRASTRUCTURE CAPITALIZATION
16 Sec.
17 3901. Scope of chapter.
18 3902. Definitions.
1 3903. Establishment.
2 3904. Award of grants.
3 3905. Award and administration of loans.
4 3906. Funds.
5 § 3901. Scope of chapter.
6 This chapter relates to the Water Supply and Wastewater
7 Infrastructure Capitalization Program.
8 § 3902. Definitions.
9 The following words and phrases when used in this chapter
10 shall have the meanings given to them in this section unless the
11 context clearly indicates otherwise:
12 "Applicant." A municipality, a municipal authority,
13 industrial development corporation or an investor-owned water or
14 wastewater enterprise that submits an application under 64
15 Pa.C.S. § 1558 (relating to Water Supply and Wastewater
16 Infrastructure Program).
17 "Authority." The Commonwealth Financing Authority
18 established under 64 Pa.C.S. § 1511 (relating to authority).
19 "Cost of a project." Any of the following:
20 (1) Costs and expenses of acquisition of interests in
21 land, infrastructure, buildings, structures, equipment,
22 furnishings, fixtures and other tangible property which
23 comprises the project.
24 (2) Costs and expenses of construction, reconstruction,
25 erection, equipping, expansion, improvement, installation,
26 rehabilitation, renovation or repair of infrastructure,
27 buildings, structures, equipment and fixtures which comprise
28 the project.
29 (3) Costs and expenses of demolishing, removing or
30 relocating buildings or structures on lands acquired or to be
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1 acquired.
2 (4) Costs and expenses of preparing land for
3 development.
4 (5) Costs and expenses of engineering services,
5 financial services, accounting services, legal services,
6 plans, specifications, studies and surveys necessary or
7 incidental to determining the feasibility or practicability
8 of the project.
9 "Industrial development corporation." An entity certified as
10 an industrial development agency by the Pennsylvania Industrial
11 Development Authority Board under the act of May 17, 1956 (1955
12 P.L.1609, No.537), known as the Pennsylvania Industrial
13 Development Authority Act.
14 "Investor-owned water or wastewater enterprise." A nonpublic
15 entity which supplies water or provides wastewater services to
16 the public for a fee.
17 "Municipal authority." A public authority created under 53
18 Pa.C.S. Ch. 56 (relating to municipal authorities) or under the
19 former act of May 2, 1945 (P.L.382, No.164), known as the
20 Municipality Authorities Act of 1945, which supplies water or
21 provides wastewater services to the public for a fee.
22 "Project." An activity approved for a grant or loan under 64
23 Pa.C.S. § 1558 (relating to Water Supply and Wastewater
24 Infrastructure Program).
25 § 3903. Establishment.
26 There is established within the department a program to be
27 known as the Water Supply and Wastewater Infrastructure
28 Capitalization Program. The program shall finance single-year or
29 multiyear grants to municipalities and municipal authorities and
30 loans to municipalities, municipal authorities, industrial
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1 development corporations and investor-owned water or wastewater
2 enterprises or projects which are approved by the Commonwealth
3 Financing Authority and which, when completed, construct, expand
4 or improve water and wastewater infrastructure which is related
5 to economic development.
6 § 3904. Award of grants.
7 Upon being notified by the authority that a grant has been
8 approved under 64 Pa.C.S. § 1558(c) (relating to Water Supply
9 and Wastewater Infrastructure Program) for a municipality or
10 municipal authority, the department shall, within 45 days of
11 receiving notice, enter into a contract with the municipality or
12 municipal authority. The contract shall be for the amount
13 approved by the authority. Upon entering into a contract with
14 the municipality or municipal authority, the department shall
15 award the grant for the amount specified in the contract.
16 § 3905. Award and administration of loans.
17 (a) Award.--
18 (1) Upon being notified that a loan has been approved
19 under 64 Pa.C.S. § 1558(d) (relating to Water Supply and
20 Wastewater Infrastructure Program) for an applicant, the
21 department shall, within 45 days of receiving notice, enter
22 into a contract with the applicant. The contract shall be for
23 the amount approved and shall specify the terms of the loan
24 in accordance with all of the following:
25 (i) A loan shall be at an interest rate not to
26 exceed 1%.
27 (ii) A loan shall be for a term not to exceed 20
28 years.
29 (2) Upon entering into a contract with the applicant,
30 the department shall award the loan for the amount specified
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1 in the contract.
2 (b) Administration.--Loans made under this section shall be
3 administered by the department. Loan payments received by the
4 department for a loan awarded under this section shall be
5 deposited in the General Fund.
6 § 3906. Funds.
7 Proceeds of the borrowing authorized by the electors pursuant
8 to the act of February 12, 2004 (P.L.72, No.10), known as the
9 Water and Wastewater Treatment Project Bond Act, shall be used
10 by the department in funding grants and loans awarded under this
11 chapter.
12 Section 2. Section 1504 of Title 64, added April 1, 2004
13 (P.L.163, No.22), is amended by adding definitions to read:
14 § 1504. Definitions.
15 The following words and phrases when used in this chapter
16 shall have the meaning given to them in this section unless the
17 context clearly indicates otherwise:
18 * * *
19 "Community development financial institution." A community
20 development financial institution certified in accordance with
21 the Community Development Banking and Financial Institutions Act
22 of 1994 (Public Law 103-325, 108 Stat. 2163).
23 * * *
24 "Investor-owned water or wastewater enterprise." A nonpublic
25 entity which supplies water or provides wastewater services to
26 the public for a fee.
27 * * *
28 Section 3. Section 1552(e) of Title 64, added April 1, 2004
29 (P.L.163, No.22), is amended to read:
30 § 1552. First Industries Program.
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1 * * *
2 (e) Loan guarantees.--
3 (1) An applicant may request a guarantee for a loan to
4 be made by a commercial lending institution or community
5 development financial institution to assist with the
6 financing of a project related to tourism or agriculture. The
7 applicant may be the commercial lending institution or
8 community development financial institution applying on
9 behalf of a borrower. The application must be on the form
10 required by the board and must include or demonstrate all of
11 the following:
12 (i) The applicant's name and address. If the
13 applicant is a commercial lending institution or
14 community development financial institution, the
15 borrower's name and address.
16 (ii) A description of the project.
17 (iii) A statement describing the anticipated
18 economic impact to the Commonwealth and the host
19 municipality as a result of the project.
20 (iv) A description of the proposed project
21 financing, including terms, conditions and the collateral
22 or security required for the loan for which the guarantee
23 is being requested.
24 (v) A copy of the applicant's last two years of
25 financial statements prepared or reported on by an
26 independent certified public accountant. If the applicant
27 is a commercial lending institution or community
28 development financial institution, a copy of the
29 borrower's last two years of financial statements
30 prepared or reported on by an independent certified
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1 public accountant.
2 (vi) The amount of the loan guarantee that is being
3 requested.
4 (vii) The total project cost and the identification
5 of all sources of capital for the project.
6 (viii) Any other information required by the board.
7 (2) The board shall review the application to determine
8 all of the following:
9 (i) That the project has been awarded a planning
10 grant under this section or that at least $1,000,000 of
11 private funds are being invested in the project.
12 (ii) That the value of the proposed collateral is
13 sufficient to cover the full amount of the loan.
14 (iii) That the applicant complied with all other
15 criteria established by the board.
16 (3) Upon being satisfied that all requirements have been
17 met, the board may approve the guarantee, and, if approved,
18 the authority shall execute a guarantee agreement in favor of
19 the commercial lending institution or community development
20 financial institution stating the terms and amounts of the
21 guarantee. The guarantee may not exceed 50% of the
22 outstanding principal amount of the loan or $2,500,000 at any
23 point in time, whichever is less. In addition to any other
24 terms and conditions required by the board, the guarantee
25 agreement shall provide for all of the following:
26 (i) The procedure for the submission by the
27 commercial lending institution or community development
28 financial institution of a claim for payment. This
29 procedure shall require that the commercial lending
30 institution or community development financial
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1 institution demonstrate that it has exhausted all
2 available remedies against the borrower, other guarantors
3 and collateral before seeking payment under the
4 agreement.
5 (ii) A requirement that a percentage of any moneys
6 recovered subsequent to the payment of a claim by the
7 authority be remitted to the authority.
8 (iii) Periodic reporting requirements by the
9 commercial lending institution or community development
10 financial institution regarding itself and regarding the
11 loans which have been awarded guarantees under this
12 section.
13 (4) The board may establish a subcommittee composed of
14 one or more board members and department staff to supervise
15 the progress of projects for which loan guarantees have been
16 awarded under this section.
17 * * *
18 Section 4. Title 64 is amended by adding a section to read:
19 § 1558. Water Supply and Wastewater Infrastructure Program.
20 (a) Establishment.--There is established a program to be
21 known as the Water Supply and Wastewater Infrastructure Program.
22 The program shall provide financial assistance in the form of
23 single-year or multiyear grants to municipalities and municipal
24 authorities and in the form of loans to municipalities,
25 municipal authorities, industrial development corporations and
26 investor-owned water or wastewater enterprises for projects
27 which, when completed, construct, expand or improve water and
28 wastewater infrastructure which is related to economic
29 development.
30 (b) Application.--A municipality, a municipal authority, an
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1 industrial development corporation or an investor-owned water or
2 wastewater enterprise may submit an application to the authority
3 requesting financial assistance for a project. The application
4 must be on the form required by the board and must include or
5 demonstrate all of the following:
6 (1) The name and address of the applicant.
7 (2) A statement of the type and amount of financial
8 assistance sought. If the applicant is requesting financial
9 assistance in the form of a grant, the request may not exceed
10 75% of the cost of the project.
11 (3) A statement of the project, including a detailed
12 statement of the cost of the project.
13 (4) A financial commitment from a responsible source for
14 any cost of the project in excess of the amount requested. If
15 the applicant is requesting financial assistance in the form
16 of a grant from the department, the financial commitment may
17 not be in the form of a grant from a Commonwealth agency.
18 (5) A firm commitment from the project user to use the
19 project upon completion.
20 (6) Proof that the applicant has secured planning and
21 permit approvals for the project from the Department of
22 Environmental Protection.
23 (7) Any other information required by the board.
24 (c) Review and approval of grant applications.--
25 (1) If an applicant is requesting financial assistance
26 in the form of a grant, the authority, in conjunction with
27 the Department of Environmental Protection, shall review the
28 application to determine all of the following:
29 (i) That the applicant is not an investor-owned
30 water or wastewater enterprise.
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1 (ii) If the project is related to economic
2 development.
3 (iii) If there is a financial commitment for at
4 least 25% of the project.
5 (iv) If the source of the financial commitment is
6 from a responsible source.
7 (v) If the municipality or municipal authority is
8 firmly committed to using the project upon completion.
9 (vi) If the municipality or municipal authority has
10 secured planning and permit approvals for the project
11 from the Department of Environmental Protection.
12 (vii) That the municipality or municipal authority
13 did not receive a grant or loan under section 1551
14 (relating to Business in Our Sites Program) for the
15 project.
16 (viii) If the municipality or municipal authority
17 complied with all other criteria established by the
18 board.
19 (2) Upon being satisfied that all program requirements
20 have been met, the authority may approve the application in
21 accordance with all of the following:
22 (i) The grant may not exceed $5,000,000 per project.
23 (ii) Grants under this program shall not exceed
24 $10,000,000 in the aggregate per municipality or
25 municipal authority.
26 (iii) The aggregate amount of grants awarded under
27 this subsection shall not exceed $125,000,000.
28 (3) If the authority approves the application, the
29 authority shall notify the department of the amount approved.
30 (d) Review and approval of loan applications.--
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1 (1) If an applicant is requesting financial assistance
2 in the form of a loan, the department, in conjunction with
3 the Department of Environmental Protection, shall review the
4 application to determine all of the following:
5 (i) If the project is related to economic
6 development.
7 (ii) If a financial commitment exists for any cost
8 of the project in excess of the amount requested.
9 (iii) If the source of the financial commitment is
10 from a responsible source.
11 (iv) If the project user is firmly committed to
12 using the project upon completion.
13 (v) If the applicant has secured planning and permit
14 approvals for the project from the Department of
15 Environmental Protection.
16 (vi) That the applicant did not receive a grant or
17 loan under section 1551 for the project.
18 (vii) If the applicant complied with all other
19 criteria established by the board.
20 (2) Upon being satisfied that all program requirements
21 have been met, the board may approve the application in
22 accordance with all of the following:
23 (i) The loan may not exceed $5,000,000 per project.
24 (ii) Loans under this program shall not exceed
25 $10,000,000 in the aggregate per applicant.
26 (3) If the authority approves the application, the
27 authority shall notify the department of the amount approved.
28 Section 5. This act shall take effect immediately.
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